Strengthen IP – Increase revenue
Dr Ja-Kyun Koo, CEO, LSIS
Ja-Kyun Koo, Chief Executive Officer of LSIS, a global leader in power solution, automation and green business, explains why it is so important for a company to be able to monetize R&D and IP investment and how a standardization strategy can help in this.
Dr Ja-Kyun Koo, CEO, LSIS
LSIS has put in place a strong standardization strategy. What drove your decision?
Koo: Companies that pursue a technology-based business have to significantly invest in R&D. They also have to find the right balance between protecting their innovations and IP (intellectual property) as well as building their income and markets.
At LSIS we are successful in both. We have understood that we need to standardize to allow our products to connect and communicate with others that are already in the market place but also new products that will be added later on.
We create technology solutions that can be used by many other people because we want a big share of a very big pie, rather than a small pie all to ourselves. In my opinion, this business strategy provides us with the most concrete return of our investment.
So why is it that many technology companies try to develop their own standards to protect IP?
Koo: In my opinion there are two ways of looking at this: the technological and the business point of view. Engineers often don’t want to make their technology available to others; they are afraid that this means that they will lose their competitive advantage; their ability to get money for their innovation. In my opinion this is exactly where the problem lies. I believe that it is better for business when others are able to connect to your technology. This provides more reasons for others to build products that interoperate with yours and overall advances further technology development.
When I look at it with my business goggles I see that the result is again similar. If I make my technology broadly accessible then I am able to create a much bigger market. Of course a successful technology will also stimulate competition. However, with a good standardization strategy, focused innovation and a high-quality manufacturing process I can achieve a good return on investment. The ability to use standardized components in the manufacturing process also lowers production costs. As you see, it is not only important to innovate, it is equally important to allow markets to develop.
LSIS actively participates in IEC work. Why is that?
Koo: One of the reasons why we participate in the IEC is that it allows us to link IP with business. To give you an example: we developed an industrial automation technology which became part of the IEC 61158 Standard. This kind of recognition of a technology not only helps build our business and increases our overall revenue; it also strengthens our IP.
This sounds counterintuitive but in reality, when a company participates actively in standardization work, this provides the opportunity to learn in advance where technology is moving and the ability to share new technology development broadly.
I think many more technology companies in Korea and elsewhere should take advantage of this and participate actively in the IEC.
Did your view of standardization change over time?
Koo: I have to admit, when I was a professor, I knew close to nothing about the field of standardization. At the time I looked at it the same way a consumer would: just as something that makes things more convenient to use. I definitely didn’t understand the importance and business impact.
However, when I became the CEO of LSIS in 2009, I realized how important standards are in order to build Smart Grids, power equipment and to increase overall efficiency. At that time I was also designated as the private sector member of the Korean Industrial Standards Commission. Over the past few years, my interest and understanding of the importance of standardization has increased so much that several of my staff now actively participate in the IEC.
I am committed to increasing our investment in this area because standardization will become more and more important. With it we are able to increase the convenience and efficiency for everyone.
In how many areas of IEC work is LSIS involved in?
Koo: LSIS actively participates in all areas that directly impact our business. For example we are very active in many technologies that touch upon the Smart Grid. We continuously innovate in renewable energy technologies. In PV installations we are probably one of the only profitable manufacturers out there. We have for example developed a humidity-proof, freeze-proof floating solar structure that helps reduce impact on land, for example by avoiding that trees have to be cut down to make space for solar farms. Instead these novel systems can be installed on open water, for example to double up power generation on lakes behind hydro dams. In warm waters, this installation provides shade that can limit the growth of green algae.